RBI bond buys eased Covid woes: UN Body

New Delhi: The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) on Tuesday attributed India’s wider fiscal deficit to both discretionary measures and the direct impact of the Covid-19 pandemic on revenues, with the latter playing a more prominent role and pegged the gross financing needs of the country at 10-16% of the gross domestic product (GDP).

In its report ‘Beyond the pandemic: Building back better from crises in Asia and the Pacific’, it also said that in the Asia Pacific region, many central banks have been buying government bonds, as in India, and early evidence suggests that such interventions were helpful as bond yields declined, and exchange rates stabilised.

“In Asia and the Pacific, many central banks have been buying government bonds, as in India, Indonesia, the Philippines, the Republic of Korea and Turkey. Early evidence suggests that such interventions were helpful: bond yields declined, and exchange rates stabilised,” it said.

In an unprecedented move, the Reserve

(RBI) has announced buying bonds worth ₹1 lakh crore in the first quarter, to keep interest rates in check as part of its efforts to support growth.

The report also said that Kerala has a public health service with an excellent reputation and building on its experience from previous epidemic outbreaks, Kerala mobilised a state-wide response working with local social partners in a more coordinated and coherent manner.

“Health is high priority and the state has invested in its system, ensuring sufficient health workers,” it said.

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